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ECMA04F  October 14, 2005
Briefly Explained Answers to First Term Test
There were three versions of the exam.
All were labeled “Version 1".
To distinguish the three
versions, you should look at the professors’ names.
Correct Answers
Version 1 (“Profs. Michael Krashinsky and Gordon Cleveland”):
D K O A H B G K I N B H G J M Q H G H V D R I S B
Version 2 (“Profs. Gordon Cleveland and Michael Krashinsky”):
E J N H A N B G K I A F J G N H Q F V H F S S I A
Version 3 (“Professors G. Cleveland and M. Krashinsky”):
K D M G B I N B G K F A K H O I P H U G B T T J E
Brief Explanation
Q12
dY/dX = 0.5[400  4X
2
]
0.5
(8X) = 4X[400  4X
2
]
0.5
To get opportunity cost of X, use dY/dX
To get opportunity cost of Y, use dX/dY, or inverse of dY/dX
Q3:
Plug in for Y, so U = X[400  4X
2
] = 400X  4X
3
Then set dU/dX = 0 for maximum.
Q45:
The business leader suggests we are inefficient, so we start at a point like A; he wants us to cut
taxes to become efficient, that is, to move to a point like B or C.
The newspaper columnist suggests we want more Y and less X, but does not suggest we are
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 Fall '09
 Cleverland

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